Internet service provider TalkTalk has stepped up its criticism of the government, this time attacking plans to add 50p per month to all phone bills to fund next-generation broadband networks in rural areas.

Charles Dunstone, chief executive of TalkTalk, the second largest consumer broadband provider in the UK, described the tax as "unjust and regressive", claiming that it will serve only to subsidise richer households that can afford superfast broadband anyway.

"As well as being unfair we estimate that the increase in price will mean that more than 100,000 mostly low income homes will be forced to give up their broadband lines. This is wholly inconsistent with the government's plans to tackle digital exclusion by increasing the uptake and use of broadband," he said.

"Crucially the scheme is likely to delay next-generation broadband rollouts in rural areas rather than hasten it, as private investors will wait for public funds to be made available. This will mean that much of the tax will be wasted investing in networks that the private sector would have built anyway."

Andrew Heaney, director of strategy and regulation at TalkTalk, will give evidence to the BIS Committee later today to outline the company's concerns that the government is dodging public debate on the tax.

The attack comes hot on the heels of TalkTalk's outspoken criticism of Lord Mandelson's proposed three strikes rule for cutting off the internet connections of persistent illegal file sharers.